American banks alleviated their loan underwriting standards and assumed additional credit risk this year, according to the Office of the Comptroller of the Currency report.
The report, encompassing the 12 months ending on June 30, indicated this year’s federal survey showed several banks are bolstering their portfolio growth and yield by easing standards. Credit risk is increasing as well.
According to the OCC, underwriting standards for retail loans eased in 27% of the major banks. Commercial underwriting standards loosened in 30% of the 95 major banks and only tightened in 6%.
The trends in this survey were similar to those in the years leading up to the financial crisis between 2007 and 2009.
The material has been provided by InstaForex Company – www.instaforex.com